Once your home is rent ready, and you’ve done your advertising, you will probably find yourself with someone who is interested in renting your home. How do you screen and make sure this applicant is qualified to take possession of your property?
The application screening process is an essential part of the property management business. You have to make sure you are fair and consistent across the board for everyone who applies. The process should include three parts; income verification, credit and background screening, and rental history
Income Verification and Tenant Screening
When reviewing income, make sure your applicant brings in enough monthly income to cover the rental rate. A lot of times, this is done by setting a ratio. Whether you want an applicant to earn two, three, or four times the monthly rent, it’s important to feel comfortable allowing them to move into your home. It’s also very important to set specific standards for the documentation you’ll allow an applicant to provide when verifying income.
Credit Report and Background Screening
With a credit report, you are looking to make sure your applicant has a history of making on-time payments. Each individual will have different credit standards. What’s important is that you’re fair and consistent with every application.
Obtain a nationwide background report on your applicants. Local or state background checks are not sufficient. Make sure you have a fair amount of information about the individual who will potentially be living in your home.
Verifying Rental History
Rental verification requires you to reach out to an applicant’s previous landlords. Get a verbal reference or send a questionnaire to be filled out. Make sure you ask specific questions pertaining to how well the applicant made payments on time. You also want to know if they took care of the property and if it was returned in good condition at the end of the lease term.